Tag Archives: Distance Pricing

I don’t begrudge the MBTA for charging fares for its services. Actually, I think it is very important that the T get its fare structure right.

Unfortunately, the T never has gotten one particular aspect of its fares right: monthly passholders pay full fare in cash when they ride on a higher-level service. A pass might be good for several dollars credit against the fare on one service, and not a dime on another. The T inexplicably fails to give passholders the full value across the entire system that they purchased for one particular service.

An illustration might help. There are two levels of express bus service, inner express and outer express. The outer express bus generally travels to more distant stops. An $89 inner express bus pass is good for the entire $2.80 inner express bus fare. Not surprisingly, the pass is not good for the $4.00 outer express bus; there is a more expensive pass for that bus. But here’s the riddle: if I offer an inner express pass good for a $2.80 fare, and the actual fare is $4.00 for the outer express bus, I only should have to pay an extra $1.20 cash, right? Not so, at least on the MBTA. Passholders receive no discount on the more expensive service. They pay full fare, even though they hold a pass that would entitle them to credit for all of the fare on a different bus. (And as an aside, there is an additional complication that the T charges different cash fares and prepaid pass/charlie card fares).

This has been a problem for years. It is most obvious with the flexible passes for the express bus, commuter rail, and boat, because there are multiple levels of service. However, “Link Pass” on the stored value card offers no solution, except to add a further technological hurdle to the administrative one. Fare-takers on the commuter rail and boat don’t have the equipment to verify that a rider has a valid “Link Pass” on their stored value card.

To their credit, T fare takers typically are generous when it comes to making accommodations to passengers to ameliorate this nonsensical no-discount policy. But wouldn’t it be better if the T used a more rational fare structure? A $4 fare, minus a $2.80 credit for a monthly pass, ought to result in a $1.20 cash fare.

Last week the T proposed to increase subway fares to $2.00 and local bus fares to $1.50. From just 85¢ in 2000, the proposal would more than double subway fares in just nine years.

What is really interesting about this is it also would put subway and bus fares at their highest levels in Boston ever, even after the prices are adjusted for local inflation. In other words, the Boston subway never has been as costly to ride in real world terms as it will be if the fare increase is approved.

In 1897, a nickel bought more than it does today. A lot more. According to the Bureau of Labor statistics, a nickel then had 96% more value in Boston than a nickel today. If you adjust the value of the nickel (or quarter) for the additional buying power in had in the past, you get a chart like the one on the right (which shows fares in constant dollars since 1945).

The actual value of the nickel fare in 1897 was $1.35 in today’s dollars, which is inexpensive but not so much of a steal. The standard fare right now is $1.70. In the Boston subway’s 112-year history, the standard fare been higher than it is right now in constant dollars just three times: in 1933 ($1.71), 1954 ($1.77), and in 1981 ($1.90). And for 28-years, the 1981 peak has stood as a high-water mark for the regular subway fare (in constant dollars). If the T gets its way and promptly implements the fare hike, it will set a new record for unaffordability, although because exit fares recently were eliminated the burden will fall disproportionately on innercity riders who do not exit at suburban stops where previously there were surcharges.

What is even more interesting is that the T is raising fares just as prices for private transportation are falling. Or at least not rising to the same extent. The chart shows dotted lines for private transportation costs in Boston and nationwide for public transit costs (also from the Bureau of Labor Statistics), both of which have continued to decline relative to background inflation as the T dramatically raised its fares. (note: for purposes of the graph, private transportation costs were equalized to subway fares for the year 2000; the trend of costs upward or downward is what is significant) For fifty years, changes in regular T fares corresponded roughly to changes in private transportation costs (both in direction and magnitude), but in the last ten years private costs have been flat whereas standard subway fares soared. I’m no economist, but it seems like the T should be able to keep its customers’ costs flat. Instead the T simply failed to hold the line.

Riders still can take heart from a historical perspective. Each of the previous real dollar fare-price records were short-lived. In 1981 and 1954, the fare increases were almost immediately rescinded. The next year fares were cut– an unusual occurrence– by 20% and 25% respectively. In 1982, for example, the Legislature restored funding that the T lost the previous year. And in 1934, a bout of deflation that caused the rise in the real fare price was broken and the real fare price in constant dollars declined (even though the stated fare was unchanged).

The rate hike proposal probably isn’t the best option. Probably a fairer solution (pun alert) would be to restore some rationality to the subway fare structure by reintroducing some form of distance pricing. Functionally the T is closer to that goal because it has introduced an electronic fare system, but distance pricing would require a revival of exit fares. And Charlie got stuck on the subway as a result of exit fares. No one wants Charlie to get stuck again. A 60-year-old ditty still drives policy in some quarters. More on distance pricing another time.

Although the fare hike may possibly be a fait accompli, the T scheduled “workshops” for riders to speak out about it. I expect they should get an earful. Not for nothing, the first session is scheduled to be conducted in the State House, Gardner Auditorium, on Monday, August 10, from 4pm to 7pm. Probably the T hopes someone there will be listening.

Whatever decision the state makes, it will be a painful one. But on the other hand, history tells us that $2.00 to ride the Boston subway — even for just one stop — is just too high a price.